August 15, 2014
In a presentation before the Joint Money Committees today, Governor McAuliffe said:
“The interim forecast reduces revenue from what was included in the Appropriation Act by $859.5 million in fiscal year 2015, as growth falls from 5.2 percent in the official forecast to now 2.7 percent.
“The interim forecast also conservatively projects total revenue growth of 2.7 percent in fiscal year 2016 compared with 4.1 percent in the official forecast. This is a reduction of $1.1 billion.
“When the changes in the interim revenue forecast are combined with the revenue shortfall carried over from fiscal year 2014 of $438 million, the total revenue shortfall for the three year period is nearly $2.4 billion.
“The total shortfall breaks down to about $1.3 billion in the first year and $1.1 billion in the second year.
Clearly, this is not good news, and though the shortfall can be partially offset by withdrawals from the Revenue Stabilization Fund (the budget provision designed for exactly this circumstance), the projected FY15 shortfall of $345.5M and the FY16 shortfall of $536 will mean significant reductions in a number of areas and programs. The reductions in administrative agency budgets will begin almost immediately.
The unknown in this particular round of cuts is what role the General Assembly will play when they come back for Special Session in September.